Question
Ruger Inc. is a mature, manufacturing firm, growing3%a year. It expects to generate$15million in after-tax operating income and$6million in free cash flow to the firm
Ruger Inc. is a mature, manufacturing firm, growing3%a year. It expects to generate$15million in after-tax operating income and$6million in free cash flow to the firm next year. You believe that the firm can be significantly restructured to double its return on capital on new investments (existing investments and operating income from those investments cannot be altered). If the cost of capital is8%, estimate the new value of the firm through the restructuring (assuming growth stays at 3\%). (Value of control) a.$120b.$255c.$131d.$210e.$300
could you please rework this answer beacause i come up with a different answer $210 millions instead of $120 millions.
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